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IN RE JAHRLING, Bankr. Court, ND Illinois 2014 – Google Scholar.

Jahrling is an Illinois lawyer who filed for bankruptcy protection. A creditor who had won a legal malpractice judgment against Jahrling sought to block the discharge of that obligation in the bankruptcy proceeding.

“The Estate seeks to except from discharge a $26,000 state court legal malpractice judgment entered against Jahrling in 2007. It also seeks to deny the Debtor a discharge. The Amended Complaint asserts causes of action under four Bankruptcy Code (“Code”) sections: § 523(a)(4) — denial of discharge of a particular debt due to defalcation by a fiduciary; § 523(a)(6) ….” In other words the creditor was claiming that Jahrling breached his fiduciary duty to the creditor and therefore could not discharge the debt in his bankruptcy proceeding.

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BEFORE THE HEARING BOARD.

The ARDC has asserted a problematic claim against a lawyer who split a fee with another lawyer who did some of the work on the matter. I believe that the claim represents a misreading of the text of Rule 1.5(e).

First, I will quote the complaint:

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BEFORE THE HEARING BOARD.

The ARDC has filed a complaint against two lawyers of a Chicago law firm and has alleged that they engaged in the unauthorized practice of law in New Mexico, Georgia and North Carolina. This is an unusual complaint. Usually, the ARDC brings cases for the unauthorized practice of law against those who were not licensed in Illinois and who attempted to practice law in Illinois. The two lawyers accused in the complaint are licensed in Illinois and are in good standing with the Illinois. The ARDC has claimed that they wrongfully practiced in other states and failed to promptly refund fees for those matters. The underlying matters involved real estate foreclosures in other states.

This case is a reminder to everyone that Illinois lawyers are not licensed to practice law in other states.

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One of the recurring themes that I see is that a client has a problem with a lawyer, but the client waits years and years before addressing what to do about it. Inevitably, the statute of limitations (2 years from discovery of injury) runs while the client deals with other issues.

First, if you are the subject of a bad ruling in a case, ask your lawyer to appeal the ruling. If the decision cannot normally be appealed, ask the trial court to certify it for an immediate appeal. Rule 304 allows a litigant to attempt to certify a question for an appeal:

Rule 304. Appeals from Final Judgments That Do Not Dispose of an Entire Proceeding

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This case, William L. Gunlicks v. Mayer Brown LLP, 2014 IL App (1st) 130845-U, is far too important to be reported in an unpublished opinion. Sadly, the opinion is unpublished for reasons that are unfathomable. The compliant alleges that Mayer Brown breached the duty of care in representing the plaintiff after he had agreed to the entry of a cease-and-desist order.

Gunlicks was a client of Mayer Brown. He was accused by the Securities and Exchange Commission (SEC) of violating Section 17(a)(2) of the Securities Act of 1933. Gunlicks was the founder, CEO and director of Founding Partners Capital Management Company, an investment adviser. In 2007, the SEC and Gunlicks entered into a cease-and-desist order that required “Gunlicks to cease from violating Section 17(a)(2) of the [1933 Act]. According to the cease and desist order, the SEC found that Gunlicks violated Section 17(a)(2) when he ’caused Founding Partners to have Stable-Value pay an undisclosed fee to Stewards and had Equity Fund and Stable-Value engage in transactions that were not consistent with their offering memoranda including transactions with entities under common control with Founding Partners.'” Opinion at ¶ 8.

In 2009, the SEC commenced an onsite compliance examination of Founding Partners’ records to determine if Founding Partners was in compliance with the cease-and-desist order. Shortly thereafter, the SEC filed a complaint for injunctive relief against Founding Partners and Gunlicks. The complaint alleged numerous securities law violations by the Defendants. As might be expected, the litigation went poorly for Founding Partners and Gunlicks.

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Scott v. Burgin, DC: Court of Appeals 2014 – Google Scholar.

The issue of privity frequently arises in legal malpractice litigation. A party lacks privity when the party did not have an attorney-client relationship with the lawyer. Recently, the privity rule has been relaxed by courts to allow lawsuits for legal malpractice by some persons who did not have an attorney-client relationship, such as the beneficiaries of an estate plan. Thus, a lawyer who breaches the duty of care in drafting an estate plan can sometimes be subject to suit by the beneficiaries who lost their inheritance.

Here, the plaintiff was the girlfriend of the decedent. She alleged that the lawyers for Kenneth Woodruff were negligent in failing to prosecute his divorce action against his wife. Burgin alleged that, had the divorce been obtained, she would have been eligible to receive certain retirement benefits upon Woodruff’s death.

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The case is North Carolina State Bar v. Paul T. Jackson, 14 DHC 20.

The case is part of a growing trend to bring disciplinary charges against prosecutors who fail to disclose exculpatory evidence.

The important facts, as set forth in the complaint, are alleged to be as follows:

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I last discussed this problematic topic on June 30th. This unpublished decision, Godbold v. Karlin & Fleisher, LLC, 2014 IL App (1st) 131523-U, illustrates a malpractice trap contained in Illinois law.

Usually, the rule in Illinois is that you must wait to file your malpractice action until you lose the underlying lawsuit. However, you should not wait to sue while the underlying decision is on appeal. That is the unfortunate mistake that the lawyers made in the Godbold case.

Underlying Case – Plaintiff Missed the Statute of Limitations

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BEFORE THE HEARING BOARD.

This is a rare case where a prosecutor is being accused of wrongdoing for failing to disclose that a witness changed his story and for allegedly misleading the court about the witness’ testimony.

What is odd about the case is that the ARDC chose this prosecutorial misconduct case to prosecute. This appears to be the first such case brought by the ARDC.

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BEFORE THE HEARING BOARD.

I have a strong opinion on this case – this is a dreadful act of overreaching by the ARDC. Ms. Naughton and a friend were accused of disorderly conduct after a Cubs game in 2012. In 2013, she was tried and acquitted of all charges.

Now, in an atrocious abuse of prosecutorial discretion, the ARDC has filed charges alleging the same facts as were alleged in the criminal case.

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